Prestige Institute of Management & Research

Presentation of

Strategic Management

Submitted to: Submitted By:Prof Ranjana Patel Anushree Bakliwal

Ruchi KatareShikha RawatShivani PatelTapish ChandwaskarMBA Core Sec IV

FAST FOOD INDUSTRY

Fast Food Industry• Fast food is the term given to food that can be prepared

and served very quickly.

• While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with preheated or precooked ingredients, and served to the customer in a packaged form for take-out/take-away.

• Outlets may be stands or kiosks, which may provide no shelter or seating, or fast food restaurants.

• Franchise operations which are part of restaurant chains have standardized foodstuffs shipped to each restaurant from central locations.

Start of Fast Food Culture

• The concept of fast food pops up during 1920s.• The term "fast food" was recognized in a

dictionary by Merriam–Webster in 1951.• The concept of ready-cooked food for sale is

closely connected with urban development. • In Ancient Rome, cities had street stands that

sold bread and wine. • A fixture of East Asian cities is the noodle

shop.

• Several factors that contributed to this explosive

growth in 1950’s were:

(1) America’s love affair with the automobiles.

(2) The construction of a major new highway system.

(3) The development of sub-urban communities.

(4) The baby boom subsequent to world war second.

“Fast-food chains initially catered to automobile

owners in suburbia

FAST FOOD-THE INDIAN WAY Mr. Dhirubhai Ambani is said to have

started the first Fast Food venture by selling "pakora (Indian fast food snack)" to pilgrims in Mount Girnar over the weekends in 1932.

The fast-food giant McDonalds opened its first restaurant in India at Vasant Vihar in south Delhi on October 13, 1996

The Pizza Hut franchise also stepped into the Indian fast food market by opening a dine-in restaurant at Bangalore.

Fast food is one of the world’s fastest growing food types. The fast food industry in India is growing by 41% a year.

The Indian fast food market is growing at the rate of 30-35% per annum.It’s reached to nearly USD 6 billion in 2007. Foreign Investment holds about one-fourth of the total investments made in this sector.Reasons:– Growth in nuclear families.– Exposure to global media.– An increasing number of working

women.– Customer sophistication &

confidence.– Double Income Group.– Large Population.– Relaxation in rules & regulations.

SWOT AnalysisStrengths

• Quick Service• Affordable• Attraction• Perceived quality for price• Long market history and

fanatic followers• Employee satisfaction high• 24 hours service

Weaknesses

• Different Preferences• Lack of customization• Unhygienic and unhealthy• Limited menu

Opportunities

• Expansion via franchising or direct expansion.

• Growing nuclear families.• Growing urban lifestyle.

Threats

• Oppositions from various organizations.

• Location.• Ready- to-eat products• Health Concerns.

INTRODUCTION

• 1967 - First Domino’s outlet in USA• 1996 - First Domino’s in India at New Delhi• It is one of the chains under Jubilant Food Works

Limited.• 300 outlets in India in 22 cities with 9000 employees.• The USP of Domino’s is the “30 minute Delivery”

agenda.

• Domino's is the second-largest pizza chain in the United States and has nearly 9,000 corporate and franchised stores in 60 international markets & all 50 U.S. states.

• The menu features pizza, pasta, oven-baked sandwiches, wings, boneless chicken, salads, breadsticks, cheese sticks, and a variety of dessert items.

• Domino’s has introduced a new menu including Mexican wrap & Italian pasta.

• Income for the year is about Rs420crores which around 50% more that the previous year.

• During inflation the price of the most items was increased by Rs 100/- to Rs 200/- on an average.

Profit Margins

SWOT Analysis

Strengths:• Leading pizza delivery company in the US with more

than 5,000 stores in the US• Global franchise operations - more than 3,500 in over

50 countries • Strong brand equity supported by heavy advertising &

marketing campaigns • Supply chain & distribution network • Leader in online & mobile ordering • Well projected campaigns

Weaknesses

• Slow growing and declining same-store sales • Weakening bottom line • High staff turnover due to lack of training and

development • Same and industrial flavor • Same effin sauce

Opportunities• Growing presence in emerging markets, particularly in

India, China• Leverage supply chain & distribution system to

introduce new products.

Threats• Changing consumer habits towards healthier food

choices• Franchise operations affected by currency exchange

fluctuations• Intensive competition from a fragmented number of

small competitors

ETOP ANALYSISImpact Importance Opportunities Threats

Political 8 6 48

Economical 8 5 40

Socio-cultural 6 5 30

Technological 4 5 20

Legal 7 6

Pizza Hut: History• Pizza Hut (corporately known as Pizza Hut, Inc.) is an

American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo wings, breadsticks, and garlic bread.

• Pizza Hut is a subsidiary of Yum! Brands, Inc. (the world's largest restaurant company)

• It has approximately 34,000 restaurants, delivery/carry-out locations, and kiosks in 100 countries

• The chain was founded as a pizzeria in 1958 by

the Carney brothers - Dan and Frank.

Locations LOCATIONS

SWOT Analysis

Strengths• Part of the largest restaurant chain in the world• Over 20,000 franchises around the world• Brand leader in the UK• Innovative range of pizzas under one roof• Famous television advertising• Food attracts people of various ranges from young to old.• Sound financial situation and international turnover.• 100% owned by yum!• Pizza Hut sits on top of global full-service restaurant tree

Weaknesses• Loyal customers are feeling that the satisfaction of the pizzas is

declining.• While Novak said Pizza Hut’s expansion into China is going

exceedingly well, there is battling problems in New Zealand and Australia.

• There are complex computer systems and internal conflicts from franchisees.

• There is a lack of an organic pizzas, which will limit the target market

Threat• Rising competition undermines Pizza Hut as consumers go for greater convenience• Rising cheese costs threaten margins• Threat from Dominos pizza, also from Mc Donald’s who have tried to introduce a new meal that is a Pizza called: McPizza.

Opportunities

• New Pizzas with different crust sizes and flavours.• Pizza Hut expands Indian market menu and looks to

old favourite to bolster sales in the US• Pizza Hut targets upscale products and a downscale

consumer base

ETOP ANALYSISImpact Importance Opportunities Threats

Political 7 8 56

Economical 8 5 40

Socio-cultural 9 9 81

Technological 5 8 40

Legal 7 6 42

Competitors 7 7 49

Kentucky Fried Chicken

History• Founder

– Colonel Harland Sanders

• Beginning Developments• Change of Ownership– Harland Sanders– Jack Massey

• John Young Brown Jr.

Major Fast-Food Segments

• Six Major business segments– Sandwich Chains– Dinner Houses– Grilled Buffet Chains– Family Restaurants– Pizza Chains– Chicken Chains

SWOT Analysis

StrengthsKFC’s secret recipeName recognition and reputationInternational expansion and expansion through franchisingCo-BrandingNeighbourhood Program

Weaknesses• Many sales of KFC• Limited menu offerings• Inability to quickly bring new products to market• PepsiCo’s poor relationship with franchises• Failure to penetrate in some foreign markets

Opportunities• The Mexican market• Peso devaluation• “Dual branding”• New franchise laws in Mexico• Australian opportunity• New distribution channels

Threats• Saturation of the U.S. market• Increasing competition and rising sales of substitute products• Changing preferences of consumers• Obstacles associated with expansion in Mexico

ETOP ANALYSISImpact Importance Opportunities Threats

Political 7 8 56

Economical 8 5 40

Socio-cultural 9 5 45

Technological 5 7 40

Legal 7 6 42

MC DONALD’S

INTRODUCTION..

Industry Restaurants

Founded

May 15, 1940 in San Bernardino, California;McDonald's Corporation, April 15, 1955 in Des Plaines, Illinois

Founder(s)

Richard and Maurice McDonald McDonald's restaurant concept;Ray Kroc, McDonald's Corporation founder.

Headquarters Oak Brook, Illinois, U.S.

Number of locations 32,000+ worldwide

Key people James A. Skinner(Chairman & CEO)

Area served Worldwide

Products

Fast food(hamburgers • chicken • french fries • soft drinks • coffee • milkshakes • salads • desserts • breakfast)

Employees 400,000 (2010)

Website McDonalds.com

The business began in 1940, with a restaurant opened

by brothers Richard and Maurice McDonald in San

Bernardino, California. Their introduction of the

"Speedee Service System" in 1948 established the

principles of the modern fast-food restaurant.

McDonald's Corporation is the world's largest

chain of hamburger fast food restaurants,

serving more than 58 million customers daily.

HISTORY..

A McDonald's restaurant is operated by either a

franchisee, an affiliate, or the corporation itself.

McDonald's has opened its door in India in October

1996.

McDonald's primarily sells hamburgers, cheeseburgers,

chicken products, french fries, breakfast items, soft

drinks, shakes, and desserts.

In response to obesity trends in Western nations and in

the face of criticism over the healthiness of its products,

the company has modified its menu to include

alternatives considered healthier such as salads, wraps

and fruit.

Approximately 85% of McDonald's restaurant

businesses world-wide are owned and operated by

franchisees. All franchisees are independent, full-time

operators.

They have an efficient, assembly line style of food

preparation.

McDonald's foods are purchased from only certified

and inspected suppliers. McDonalds works closely with

ranchers, growers and suppliers to ensure food quality

and freshness.

ABOUT..

McDonald's takes food safety very seriously. More

than 2000 inspections checks are performed at every

stage of the food process. McDonalds are required to

run through 72 safety protocols every day to ensure the

food is maintained in a clean contaminate free

environment.

McDonald's was the first restaurant of its type to

provide consumers with nutrition information.

Nutrition information is printed on all packaging and

more recently added to the McDonald's Internet site.

Target Market

• Low to Mid income

• Busy people – anyone on the go!– Families (Happy Meal)– Teenagers– College students

SWOT Analysis

STRENGTHS

• Very strong brand name

• They are a global company operating more than 32000 restaurants in 109 countries.

• Large target group

• Cost Advantages

• New stores almost 100% guaranteed to succeed

• Ability to adapt when faced with criticism

• Play Area for children

WEAKNESSES

• High employee turnover in their restaurants leads to more money being spent on training.

• They have yet to capitalize on the trend towards organic foods

OPPORTUNITIES

• Low interest rates provide cheap capital for growth.

• Expand into Tier1 and Tier 2 cities • Entry into breakfast category

THREATS

• Changing customer lifestyle

• Increase in competition

• Criticism – contribute to obesity, and other health problems

ETOP ANALYSISImpact Importance Opportunities Threats

Political 8 8 64

Economical 9 7 63

Socio-cultural 9 9 81

Technological 6 9 54

Legal 7 6 42

Competitors 7 7 49

Burger King

• A global chain of hamburger fast food restaurants headquartered in unincorporated Miami-Dade County, Florida, United States.

• Started in 1953 as Insta-Burger King.

• 7,800 restaurants (domestic)

• 21.9% of fast-food market share

• Added a multi-tiered value menu in 1993 with items priced at 99¢, $1.99 and $2.99 (USD) to better compete with its competitors.

• Burger King was first to introduce the dine-in concept, and drive-through food service.

• Strategy: – New color scheme (blue instead of tan & brick)– Different style interior– Open kitchen to show off flame-broiled cooking– “Virtual fun centers” to play areas that

provides electronic interactive games.– Same menu but new cooking units.

SWOT AnalysisStrengths:– Second largest fast food hamburger restaurant

(FFHR) in the world – Strong brand equity – Growth model not capital intensive: 90% of its

restaurants are owned by franchisees – Strong financial performance.

Weaknesses:– Heavily concentrated in the US: about 65% of

operations– Not enough corporately owned stores means it relies

heavily on franchisees to execute its brand promise.

Opportunities:– New product development, particularly around breakfast– Keep building its brand through ad campaign, such as the

Whopper Virgin's– Expansion into emerging markets

Threats:– Changing consumer habits towards healthier food

choices.– Away-from home consumption declines in the US due to

tougher consumer environment– Intense competition from McDonald's, other restaurants

and even retailers– Increasing labor costs putting pressure on bottom line

margins

ETOP ANALYSIS

Impact Importance Opportunities Threats

Political 6 8 48

Economical 6 7 42

Socio-cultural 6 5 30

Technological 5 5 25

Legal 7 5 35